What is Customer Churn?
Customer churn refers to the loss of clients or customers, often expressed as a percentage of total customers, over a specific period.
How Customer Churn Affects Businesses
Revenue loss from departing customers.
Increased acquisition costs to replace lost customers.
Potential negative impact on brand reputation.
Reduced market share.
What Affects Churn Rate?
Poor customer service.
Lack of engagement with the product or service.
Better offers from competitors.
Changes in customer needs or preferences.
What is The Percentage of a "Healthy" Churn Rate?
A "healthy" churn rate varies by industry, but generally, a churn rate of 5-7% annually is considered acceptable for most businesses.
Why Reducing Customer Churn is Important?
Improves long-term profitability.
Enhances customer lifetime value.
Strengthens brand loyalty and customer satisfaction.
Reduces the cost of acquiring new customers.
Difference Between Turnover and Churn
Turnover: Typically refers to the rate at which employees leave a company.
Churn: Refers to the rate at which customers stop doing business with a company.
Improves long-term profitability.
Enhances customer lifetime value.
Strengthens brand loyalty and customer satisfaction.
Reduces the cost of acquiring new customers.
